The future of Employment Tribunal fees

With the last party conference season before the general election having now ended, it is interesting to see the position the two main parties are now taking on the future of Employment Tribunal (ET) fees. 

Fall in ET claims

The biggest change in employment law during the last four years of the Conservative-Liberal Democrat coalition government has been the introduction of ET fees. On 29 July 2013 the coalition government introduced fees of up to £250 to submit a claim to the ET and a further £950 should the claimant wish to pursue his/her claim to a final hearing.

Government statistics have indicated that since the introduction of ET fees there has been a 70% reduction in single ET cases being filed for the period April to June 2014 in comparison to the same period in 2013.

The reduction in ET claims was initially welcomed by Matthew Hancock, then Minister of State for Skills and Enterprise. He was quoted as saying: the new figures show that the introduction of fees discourages “weak and fictitious” claims.

However, concern has been raised that workers with legitimate grievances against their employers are being deterred from pursuing claims in the ET following the introduction of a fee system. Research from Citizens Advice reveals that 7 out of 10 potentially successful cases that could have gone before the ET are not going ahead.

Reviews of the system

The trade union, Unison, are continuing to pursue a judicial review of the introduction of ET fees on the grounds that the fees deny access to justice for workers treated unfairly by employers and have a disproportionate impact on women. In September 2014, following the release of the latest statistics on the fall in ET claims, the Lord Chancellor stayed proceedings in the Court of Appeal and gave Unison permission to issue a new High Court claim challenging the introduction of fees.

The government’s position on fees, or at least the level of those fees, does appear to be weakening in the face of the opposition they are encountering. The Minister for Employment Relations and Consumer Affairs, Jenny Willott has said that the level of ET fees is being kept under review by the government, adding that the regime is going to be subject to “a lot of parliamentary scrutiny”.

Although no indication has been given about what form this review will take, it seems likely that it will result in the level of ET fees being reduced and/or the remissions system for those who cannot afford the fees being relaxed; if for no other reason than to weaken the case for a judicial review.

The aim of the remission system was to protect access to justice with fees being reduced or removed entirely for people who are receiving certain benefits or whose income is below a certain level.  The government had predicted in its original impact assessment for ET fees that 31% of claimants would be eligible for fee remission. A written answer in the House of Commons has, however, revealed that just 24% of remission applications made between 29th July and 31st December 2013 were granted (either in part or in full). To put that into perspective, it essentially amounts to remission being granted in a very low 5.5% of claims.

Opposition policy

The Labour Party’s position is that it will introduce an ET system where affordability will not be a barrier to justice. The Shadow Business Secretary, Chuka Umunna announced at a speech to the TUC conference on 8 September 2014 that “the current employment tribunal system is unfair, unsustainable and has resulted in prohibitive costs locking people out of the justice they are entitled to… So if we are elected the next Labour Government will abolish the current system, reform the employment tribunals and put in place a new system which ensures all workers have proper access to justice.”

There is very little detail as to how this new system will work but it is unlikely to see the end of ET fees all together. Given the budget constraints facing any incoming government, the ET system will have to at the very least be partly self-financing. Therefore it is likely that fees (albeit lower) will remain for higher earners but with a new system put in place to ensure lower income claimants are not prevented from pursuing legitimate claims.

Conclusion

It is clear that whichever of the two main political parties form a government after the general election on 7 May 2015, the current ET fees regime will be amended to increase access to the system. The extent of these changes is though likely to vary with the Conservatives committed only to reviewing the current system whilst Labour has pledged to abolish it entirely. Either way it is likely that employers can expect ET claims to increase after the general election from their current low water mark.

Click one of our articles to continue reading about duty to make reasonable adjustments, dependents leave and disappearing employees and the latest TUPE update. Binding communications about pay, when employees strike, the on-call conundrum, the scope of reasonable adjustments and finally In a nutshell.

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